Free Cash Flow and Funding Balance

After the trip to Australia and China I decided I had not yet had my fill of Asia and income statement training so I went on to Manila in the Philippines. I was able to teach the Asia leadership group from a new client, Global Payments, a worldwide multibillion dollar payment services business based in Atlanta.

This was a larger than normal group of about 45. A lot of Asia was represented in this group. Off the top of my head we had people from the Philippines, India, Australia, Taiwan, China, Malaysia, Singapore, and Sri Lanka. As a group these managers scored over 50 percent on our financial assessment. That is well over 10 points higher than the average we get in the states.

I really enjoyed this two day class because the students had a high level of business acumen which meant we could delve into more detail. There were a lot of great questions from this group. We also were able to work our way through the material quickly.

The big issue at Global Payments is growth of revenue and cash flow. The company is currently a publicly traded Fortune 1000 company and they’d like to crack in to the Fortune 500. So the challenge is to grow revenue profitably. We started the session with some training on the income statement but quickly moved into balance sheet and cash flow training as well. We spent some time on free cash flow because it is different at Global Payments. Their large funding balance can be positive or negative due to cash settlements with their clients. So we spent some time understanding that. It turns out that free cash flow is the new darling with investors on Wall Street so it’s an important topic in all of my classes.

One student in class showed me a copy of Financial Intelligence he had on his Kindle reader. As our book has really sold well I am running into this more and more. It’s great to see our book out there. I hope it keeps on rolling along it’s been a great tool for our business.

On the first night of training I was able to attend a traditional Philippine dinner with the group. The food was really different but good. The only thing I did not try was balut. Look that one up I’ll bet you wouldn’t try it either. The people in the Philippines were very friendly. One warning is the traffic was pretty crazy. I don’t recommend trying to drive in Manila.

It was a great two weeks in Asia for me. Lots of good food, friendly people and of course quality income statement training!

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